I’ve made the argument lately that I think even if bonds perform poorly from their current low yields that they could still serve a purpose as a portfolio diversifier (see here and here). Many readers have told me that, even though they understand the arguments I’m making, it doesn’t make sense to hold bonds in…
Investor Behavior Following Large Gains & Losses
The following is a passage from The Quants by Scott Patterson: Meanwhile, a fund with ties to Nassim Taleb, Universa Investments, was also hitting on all cylinders. Funds run by Universa, managed and owned by Taleb’s longtime collaborator Mark Spitznagel, gained as much as 150 percent in 2008 on its bet that the market is far…
The Blueprint for a Bond Bear Market?
Bond investors are in constant fear of a replay of the 1970s when interest rates exploded higher in concert with sky high inflation, a double whammy of bad news for fixed income securities. But it doesn’t make much sense to compare the current set-up with that scenario. By 1970 the 10 year treasury yield was…
My Biggest Investing Mistake
J. Lukas Neely from the Endless Rise Investor has a nice piece up that highlights the mistakes of 13 different investors and how they went about fixing them. Neely put together a really great line-up of people for this including William Bernstein, David Merkel and Tobias Carlisle to name a few.
The Process of Elimination
I always like to apply the process of elimination when making financial decisions because figuring out what to avoid is where most of the value can be found in a long-term process.
Retirement Planning for Millennials
The USA Today ran a story about a recent college grad who is saving and investing aggressively with the hopes of early retirement. He’s 23 now and would like to retire by age 40. Here’s more on his lofty goal: Frank’s goal is to save $900,000 by age 40. To make that happen, he wants…
When Will The U.S. Have Its Next Recession?
From 1836-1928 the U.S. averaged a recession every 2.1 years. This included seven depressions (they were actually called panics back then) that led to an average contraction of 29% in business activity. Part of this had to do with the fact that the U.S. was on the gold standard at the time, but it’s also true that…
From Great to Good
As I’ve said before, I think Cliff Asness is one of the most interesting characters in the investment management business because he has a great combination of intelligence and humor about the financial markets. So I was glad to hear he was going to be interviewed by Barry Ritholtz for the latest Bloomberg Masters of…
Long-Term Thinking as a Contrarian Approach
One of the most interesting pieces I’ve come across lately deals with an investment firm that’s been managing the pension plan for Tampa’s police and firefighters for over 40 years. There’s a soap opera brewing between the investment firm, Bowen, Hanes, and a consulting firm that doesn’t agree with the way they do things from…
The Most Impressive Behavior Gap in the Mutual Fund Industry
I spend a lot of my time writing about the common mistakes made by investors because I operate under the assumption that cutting down on unforced errors could drastically improve portfolio performance for the majority of investors. The behavior gap between reported fund returns and actual investor returns that results from poorly timed purchases and sales…
